Att: Traditional Lenders - Question About Due On Sale Clause

[Mindy Jensen]

I always thought that when you transfer title, you trigger the due-in-sale clause in a traditional mortgage.

I see questions time and again from investors who want to transfer ownership of their residential property purchased with a traditional mortgage into their LLC but are worried about triggering the due on sale clause - or worse, don't even know the clause exists.

Some of our (non-lender) members say this never happens. I would think the banks aren't just putting random clauses in their contracts.

Can our institutional lenders chime in on this?